Novozymes A/S (NZYMB), the world’s largest maker of biofuel enzymes, rose the most among Copenhagen’s benchmark stocks after Danske Bank A/S said the share has underperformed and could gain more than 20 percent this year.
Novozymes advanced as much as 2.8 percent, making it today’s biggest gainer in the OMX Copenhagen 20 CAP (OMXC20CP) index. The stock rose 2.4 percent to 190.40 kroner at 11:16 a.m. in the Danish capital, the highest price since its 2000 listing. Trading volume was 67 percent of the three-month daily average.
Novozymes lost 10 percent last year compared with a 22 percent advance in the OMXC20 CAP index as a U.S drought boosted the price of corn, which is used in biofuel production. Danske today re-initiated coverage with a buy recommendation and said the shares will catch up with the market as the company benefits from a wider range of uses for its technologies.
“We expect a recovery in 2013 and 2014 and see potential in the broader use of cellulosic sugars reducing the dependency on ethanol for fuel,” Copenhagen-based Danske said in a note. “In our view, the downside risk to the case is limited.”
Novozymes’ BioBusiness unit is developing technologies that convert biomass into chemicals and plastics. In August, the company said it formed a partnership with Ludwigshafen, Germany- based BASF SE and Minneapolis-based Cargill Inc. on using renewable raw materials in the production of acrylic acids, an $11 billion market.
The BioBusiness division reported a 4.9 percent increase in 2012 sales to 1.07 billion kroner ($190 million). The unit’s gross profit margin was 48 percent last year, according to the Bagsvaerd, Denmark-based company’s Jan. 21 earnings report.
Novozymes said last month it will reorganize the unit on April 1, as part of a reshuffle when Peder Holk Nielsen takes over as group chief executive officer from retiring Steen Riisgaard.
Danske set a 12-month price estimate of 225 kroner, indicating a 21 percent upside from Feb. 2’s closing price.
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